Setbacks at Ground Zero

The rebuilding of Ground Zero has met with setbacks, from building delays to losing a major tenant. Indeed, brokerage giant Merrill Lynch recently ended discussions to take up space at Tower 3. The financial services company occupies roughly 2.5 million sq. ft. of space at its current downtown location.

A Merrill Lynch spokeswoman said that the financial services company has a lease running up to 2013 at its current site and is reviewing options. On the other side, Janno Lieber, president of Silverstein Properties affiliate World Trade Center Properties, said, “We wish Merrill Lynch great success and hope they decide to keep their headquarters in lower Manhattan, their historic home, for many years.”

In early July, The Port Authority announced that rebuilding effort at Ground Zero is likely to be delayed beyond its estimated time of completion. They also expect there will be a cost overrun. It will be September before they announce how long, and how much money it will take to get the job done.

“Right now, the entire Silverstein Properties World Trade Center team is focused on working with government to resolve the design and construction issues,” says Lieber. “It is urgent that these issues be resolved in order to accelerate the rebuilding of the entire World Trade Center site.”

“The dates and costs of the World Trade Center projects that the public has been told are not realistic. We are not going to make any of them,” said Port Authority Executive Director Christopher Ward in a recent statement.

Ward added that the estimated dates and budgets have been driven more by emotional and political needs than by any sort of realistic approach.

At least 15 fundamental decisions on critical components of the overall project have not been made. Once those are resolved in September, the new milestones will be released.

At least one of the issues has been resolved. The designer of the transportation hub, Santiago Calatrava, has worked with the Port Authority and decided that it is better that the wings of the transportation hub will not open and close. This will allow the hub to fit in easier with the overall site and not impose on surrounding structures.

The Port Authority is involved in building the Freedom Tower, some transportation elements, a share of the September 11th Memorial and Museum, retail development, and other site infrastructure. Its capital plan for 2007-2016 anticipates an investment of more than $ 8 billion for its share of rebuilding at the site.

The estimated completion date for the Freedom Tower is currently 2012. The project is being financed with insurance proceeds and Liberty Bond funding. Silverstein Properties is building Towers 2, 3, and 4 at an estimated total cost of $6 billion, and has already completed 7 World Trade Center. JP Morgan Chase will develop Tower 5.

About 75% of the space at 7 WTC has been leased so far, according to Simon Wasserberger, a senior vice president with CB Richard Ellis who is involved in leasing the space. The higher floors, from 43 to 52, in the 1.7 million sq. ft., 52-story building, are still empty. Major tenants at the property include Moody’s Investors Service, law firm Darby & Darby, ABN AMRO, Ameriprise and the New York Academy of Science.